2026-04-11 22:01:06
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🛩️ Delta: Fuel Shock Litmus Test
🍺 Constellation Brands: Sober Outlook
🌿 Tilray: Global Pivot
Delta kicked off FY26 by proving its premium-heavy business model can be a shield against geopolitical chaos. Despite an unprecedented spike in jet fuel prices driven by the conflict in the Middle East, the airline easily cleared Wall Street’s expectations.
Q1 was a battle between record-high demand and record-high fuel bills. Delta pivoted quickly to fare recaptures and capacity cuts.
Revenue rose 13% Y/Y to $15.9 billion ($1.0 billion beat). Remuneration from the American Express partnership grew in the double digits, while the Maintenance, Repair, and Overhaul (MRO) segment more than doubled its revenue to $380 million. They are both part of “Other” revenue.
Adjusted EPS landed at $0.64, surging 40% Y/Y and comfortably beating the $0.57 consensus. That was despite fuel expenses rising by $330 million in Q1 alone, with jet fuel prices jumping 10% in March.
Delta's fuel costs ended the quarter at a two-year high of $2.80 per gallon, a sharp move that added $330 million in unbudgeted expenses in March alone. This visual confirms why management is bracing for this trend to accelerate toward $4.30 per gallon in the June quarter.
Management’s outlook for the June quarter was a mix of aggressive margin protection and a wait-and-see approach to the full year:
$2 Billion Fuel Headwind: Delta expects its fuel bill to be $2 billion higher in Q2. To combat this, the airline is slashing capacity by 3.5%, specifically targeting less profitable red-eye and midweek flights.
Price Hikes: Delta is guiding for low-teens revenue growth on flat capacity. It intends to pass higher costs directly to consumers through fare hikes and increased bag fees.
FY26 Outlook Reaffirmed: CEO Ed Bastian refused to walk back his $6.50–$7.50 EPS guidance for the full year, though he noted a formal update would depend on the fuel environment stabilizing over the next few months.
Bastian’s core thesis is that high fuel prices act as a catalyst for change, separating high-margin winners from weaker competitors who cannot pass on costs. While the Pakistan-brokered ceasefire and the reopening of the Strait of Hormuz provided a relief rally for the stock, Delta is clearly bracing for a challenging fuel environment by leaning into its affluent customer base.
2026-04-10 20:02:48
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Earlier this week, the AI race leaderboard just saw a historic—and controversial—flip.
Anthropic announced its annual revenue run rate (ARR) has topped $30 billion. It was just a few days after OpenAI disclosed its ARR was roughly $24 billion. These numbers can be a bit confusing, but they are essentially the revenue from the past month multiplied by 12.
Founded by a team of former OpenAI employees, the safety-first AI lab has officially leapfrogged its competitor. While OpenAI is busy navigating C-suite volatility (more on that below), Anthropic has been catching up at breakneck speed.
Before we declare a new king of AI, we have to look at the accounting. Anthropic said the bigger number, but the two companies count their chips differently:
Anthropic’s gross method: They record the full amount a customer pays, then count the cloud provider’s cut (AWS/Azure/GCP) as an expense later.
OpenAI’s net method: They typically record only what they actually receive after Azure takes its share.
If we compared apples to apples, the gap would likely vanish. However, in the game of venture scale and market perception, Anthropic clearly has momentum in its favor.
The launch of its latest model, Mythos, doubles down on this enterprise-first strategy. The model, hilariously dubbed too powerful to be publicly released, is restricted to vetted partners at a 5x price premium ($125 per million output tokens). It’s a specialized tool for automated cybersecurity. In testing, Mythos autonomously uncovered thousands of previously unknown security flaws across every major operating system, including bugs that had survived decades of human review.
Anthropic now has over 1,000 enterprise customers spending $1M+ annually, and just secured a massive 3.5 gigawatt compute partnership with Google and Broadcom.
Today at a glance:
🏭 Intel: Team Blue Joins Musk’s Terafab
🤖 OpenAI: One Battle After Another
🥑 Meta: The Avocado Moment
Two weeks ago, we looked at Elon Musk’s audacious plan to solve his own chip supply constraints by building Terafab—a 100-million-square-foot vertical integration play in Austin. Our takeaway then was that while the vision was grand, the balance sheet was the ultimate bottleneck.
This week, the math changed. Intel has officially joined the Terafab joint venture.
After a high-profile handshake between Musk and Intel CEO Lip-Bu Tan at Intel’s campus last weekend, the chip giant is now a cornerstone partner alongside Tesla, SpaceX, and xAI. It’s a full-stack collaboration to restructure how silicon is built.
When we first discussed Terafab, the skepticism focused on how Musk could replicate decades of specialized foundry expertise from scratch. Intel’s entry provides two things Terafab was missing: 18A Node IP and Advanced Packaging (EMIB-T).
Intel is bringing its System Foundry approach to Austin. By integrating Intel’s packaging technology under the Terafab roof, Musk can achieve that “recursive design loop” he promised—linking logic, memory, and specialized space-hardened chips in a single, high-efficiency flow.
For Intel, this is the ultimate win for its foundry turnaround. Being the primary partner for Tesla’s Optimus and SpaceX validates Intel as the only US firm capable of leading-edge logic at this scale.
The new structure places Intel as the foundational brain, SpaceX as the bank, and Tesla/xAI as the primary customers.
This partnership moves Terafab from a speculative moonshot to a serious sovereignty play. By anchoring the project with Intel’s 18A process, Musk is hedging against capacity constraints at TSMC and Samsung while keeping the entire supply chain within US borders.
Bottom Line: With Intel bringing its manufacturing muscle to the table, the Terafab is becoming more concrete. The question for investors shifts from “Can they build it?” to “Who owns the margins when the silicon starts rolling off the line?”
Between a brutal New Yorker expose and a sudden leadership vacuum, OpenAI is making moves that look more like brand defense than technological innovation.
OpenAI just acquired TBPN (Technology Business Programming Network), a niche tech talk show, for a price tag reportedly in the “low hundreds of millions.”
In context: In 2024, Spotify renewed its deal with Joe Rogan for $250 million to reach 20M+ people globally. OpenAI just spent a similar order of magnitude on a channel with roughly ~70,000 viewers per episode.
Wait, but why? According to Sam Altman, it’s a narrative play. By owning a builder-friendly media channel, OpenAI is attempting to bypass traditional journalism. They are buying a space to speak directly to the tech elite, free from the performative attacks of mainstream news.
Not so independent: The two hosts, John Coogan and Jordi Hays, will report to Chris Lehane, OpenAI’s chief political operative. They also now have an obvious financial stake in OpenAI’s success, even if the exact terms of the deal were not disclosed. OpenAI says the show will remain editorially independent. But once a media channel is owned by the company it covers, skepticism comes with the territory.
The timing of the TBPN deal follows a devastating 16,000-word New Yorker investigation this week that paints a grim picture of OpenAI’s internal culture.
Trust Gap: The report cites memos from former leaders (including Anthropic’s Dario Amodei) alleging a pattern of manipulation and deception by Sam Altman.
Safety claims vs. reality: While OpenAI publicly claims to prioritize AI safety, the report alleges that only 1%-2% of the company’s compute has gone toward safety research, often using older hardware.
Winning at all costs: Most startling, the report says OpenAI discussed a “prisoners’ dilemma” strategy that would pit world powers against one another to secure the hundreds of billions needed for its infrastructure buildout.
While OpenAI is buying media companies, its executive bench is suddenly looking thinner. Several pillars of its leadership team came under pressure.
Fidji Simo (AGI Deployment Lead): Taking medical leave.
Kate Rouch (CMO): Stepping down to focus on cancer recovery.
Brad Lightcap (COO): Moved to “Special Projects” to help oversee a new private-equity joint venture.
Sarah Friar (CFO): The Information reports a growing rift with Altman over IPO timing. Friar has reportedly warned that a 2026 IPO may be too early given OpenAI’s projected cash burn, which could exceed $200 billion before the company reaches steady cash flow.
Bottom Line: When a company’s executive bench is thinning and its ethics face fresh scrutiny, optics management is starting to look as important as product development.
After a year of playing catch-up and a series of high-profile Llama disappointments, Meta just threw its hat back in the ring. On Wednesday, the company debuted Muse Spark, the first model from Zuck’s new Meta Superintelligence Labs (MSL).
The market loved it as shares jumped 8%.
For the first time, Zuck is walking away from his open source mantra.
Closed-Source Pivot: Muse Spark (internally known as Avocado) is a closed-source model. Its code and weights are staying behind Meta’s firewall. It will be available via Meta AI (both the app and the browser).
The Wang Era Begins: Muse Spark is the first major model tied to Alexandr Wang’s new superintelligence effort after Meta’s $14.3 billion Scale AI deal. Wang is a known proponent of closed models.
Monetization: Meta is inching closer to the commercial AI playbook with private API access, even if paid pricing hasn’t been announced yet. It would be a major development because virtually all of Meta’s revenue still comes from advertising.
Bloomberg reported that Muse Spark was trained using several third-party open-source models, including Alibaba’s Qwen. If accurate, that could raise fresh questions about model provenance and political optics in Washington.
The Good: Muse Spark looks strong in science, math, health, and visual understanding. Meta says the upgraded assistant supports Instant and Thinking modes, with a more advanced Contemplating mode rolling out to boost reasoning through multiple subagents.
The Bad: It still trails frontier leaders in coding. Zuck himself has been managing expectations, calling this a “data point on our trajectory” rather than a final frontier.
Meta is leaning into its greatest competitive advantage: distribution. The company is embedding Muse Spark into apps that reach 3.5 billion users. The model seems to target consumers over software engineers. Could Meta capture a meaningful share of AI queries simply by owning the apps already on everyone’s phones?
This puts OpenAI in a precarious strategic position. With Anthropic increasingly dominant in the high-margin enterprise market and Meta/Google owning the digital advertising world, OpenAI’s business looks stuck between a rock and a hard place.
Bottom Line: Meta is no longer the benevolent provider of free models. By closing the source and hiring the most expensive researchers in the world, Zuck has turned Meta into a direct commercial rival to the leading AI labs. For now, the market is valuing Meta primarily on its existing advertising business. That may be proven wrong if the company can start driving meaningful revenue from its proprietary models.
That's it for today.
Happy investing!
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Disclosure: I own AAPL, GOOG, META, NVDA, and TSLA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-04-07 20:04:16
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While AI labs like OpenAI and Anthropic are raising capital at eye-watering 30x to 40x forward revenue multiples, the public markets are telling a different story.
The data reveals two extremes:
AI ramp cycle discount: NVIDIA grew revenue by more than 70% last quarter, yet now trades at roughly 21x forward earnings — trailing the S&P 500 average for the first time since 2013. Similarly, Amazon now trades meaningfully below its historical valuation range as investors focus on the size of its spending bill.
Status quo premium: Conversely, Walmart has crossed a $1 trillion market cap, trading at a staggering 43x forward earnings despite modest 4% growth. The market is awarding a higher multiple to a brick-and-mortar retailer than to the world’s leading cloud infrastructure provider.
This is the irony of the AI scare trade. Investors are no longer viewing heavy R&D and CapEx as a moat-expanding advantage. Instead, they are treating ambition as a liability, rewarding low-drama retailers and staples with tech-like multiples simply because their earnings are easier to model.
Today at a glance:
The Absurdity Index: Flight to safety versus AI discount.
The Macro Catalyst: Why the Iran conflict triggered a duration reset.
The Efficiency Trap: Solving the Jevons Paradox of AI.
Software’s Big Reset: The ‘terminal value’ panic in SaaS.
The Meta Irony: Why the market is ignoring the most proven AI ROI.
The 3-Step Filter: Separating ‘deserved discounts’ from ‘generational moats.’
In a rational market, you pay a premium for growth. In the 2026 AI scare trade, that logic has been inverted. Investors are currently paying up to avoid companies ramping their AI infrastructure spending.
We are witnessing a duration reset. The market has stopped asking “How much can this grow?” and started asking “How easily can I model next quarter?” This has pushed the valuations of boring staples to levels historically reserved for SaaS darlings.
For the first time since 2013, NVIDIA is trading at a discount to the S&P 500 average.
Think about the irony: The company providing the picks and shovels for the AI revolution is being valued more conservatively than the average American corporation.
Look closely at the chart: Apple now trades at a 30x multiple, while NVIDIA sits at 21x. Apple—a company that just turned 50 and is currently grappling with stagnant iPhone cycles and a delayed AI strategy—is being rewarded with a certainty premium because it is a proven cash machine. The market is effectively saying it values Apple's past more than NVIDIA’s future.
This distortion isn’t because Walmart’s fundamental moat suddenly expanded threefold. It’s because its earnings path is cleaner.
When you buy Walmart at 43x, you are buying psychological relief. You are paying a premium to avoid worrying about Anthropic blog posts, Blackwell chip yields, power grid constraints, or geopolitical tensions in Taiwan or Iran.
The great AI rotation exists because the market is treating massive infrastructure spending as a leak in the boat rather than a motor on the back. By rewarding predictability and punishing reinvestment, the market is signaling a risk-off sentiment.
The irony is that by overpaying for the flavor of the month, investors may be locking themselves into subpar long-term returns.
2026-04-03 20:03:41
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Anthropic just handed competitors a rare look under the hood of one of its most important products. During a software update, human error exposed roughly 500,000 lines of Claude Code-related source code, and the files were quickly mirrored across the internet.
Importantly, the leak did not expose Claude’s model weights. What spilled out was the product layer around Claude Code, including architecture details and unreleased features, giving rivals a clearer view into how Anthropic built one of the hottest coding agents in AI. Claude Code generates $2.5 billion in annual revenue, a figure that has doubled since January.
The timing is brutal. Anthropic is reportedly targeting a $380 billion IPO later this year. This lapse is especially awkward for a company that has tried to differentiate itself on safety and operational discipline.
It also comes as Anthropic fights the US government over its designation as a supply-chain risk after refusing certain military uses of its models. A federal judge has temporarily blocked that designation, but the broader clash with Washington remains an overhang.
Anthropic’s core pitch was never just model quality. It was also trust. Now it has to prove that trust can survive a very public operational failure.
Today at a glance:
👟 Nike: Topsy Turvy Turnaround
🛰️ Amazon: Delta Bets on the Underdog
🤖 OpenAI: The $122 billion Round
Nike’s February quarter looked better on the surface than underneath. Revenue was flat Y/Y at $11.3 billion ($50 million ahead of expectations), and earnings per share also cleared the consensus. But the stock still fell 15%, a sign investors remain unconvinced that the turnaround is gaining real traction.
The revenue beat deserves an asterisk. While reported revenue growth was flat, the top line actually declined 3% Y/Y in constant currency.
The bigger problem is margins. Gross margin fell to 40% as Nike leaned harder on wholesale (up 5%) and stepped back from higher-margin direct sales (down 4%). In other words, Nike’s product sales are steady, but moving through less profitable channels.
Nike is effectively trading direct sales for wholesale volume to clear inventory. While this keeps the Swoosh on shelves, it is a significant drag on the bottom line that has now persisted for six straight quarters.
International remains the bigger headache.
China sales fell 7% Y/Y as local competitors like Anta and Li-Ning continued to take share.
Meanwhile, the EMEA growth of 2% Y/Y missed estimates. The current quarter (Q4) will have to contend with the war in Iran, but Q3 results show Nike was already losing momentum in the region well before the conflict began.
North America showed a modest 3% gain, but it wasn’t enough to offset the persistent weakness elsewhere.
The weakness also goes beyond the core Nike brand. Converse revenue plunged 35% to just $264 million, another sign the company’s innovation and brand issues are broader than performance running alone.
Nike remains a ‘show me story.’ CEO Elliott Hill has been in the seat for 18 months. His comment that "the pace of progress is different across the portfolio" suggests a recovery taking much longer than anticipated. The stock just hit its lowest price since 2014, but ongoing earnings compression means it remains richly valued, well above 20x forward earnings. Until Direct stabilizes, this turnaround still looks incomplete. For now, Nike is still asking investors for patience.
The space race used to be about national pride and planting a flag on the moon. In 2026, it’s all about who can stream 4K videos at 35,000 feet.
This week, Delta Air Lines announced a massive partnership with Amazon Leo (formerly known as Project Kuiper), a low Earth orbit satellite constellation. The plan is to bring high-speed Wi-Fi to 500 aircraft starting in 2028. For Amazon, this is a critical validation of its $10 billion satellite bet.
Amazon Leo is, of course, in direct competition with SpaceX’s Starlink. The disparity in raw infrastructure is almost comical. Starlink currently has over 10,000 operational satellites and has already signed up United, Southwest, and Air France. Amazon Leo has roughly 200. That said, Amazon is authorized to launch thousands more, aiming for a total network size that could eventually exceed 7,700 satellites.
Delta CEO Ed Bastian chose an ecosystem over a pure connectivity provider. By tapping Amazon, Delta integrates with AWS to personalize seat-back screens and bring Amazon’s content and shopping library directly into the cabin.
Earlier this year, Elon Musk publicly clashed with Ryanair’s Michael O’Leary after Ryanair passed on Starlink. Delta’s move shows that as competition expands, airlines may value broader commercial alignment as much as raw satellite scale.
This deal arrives as SpaceX prepares for a historic 2026 IPO. Following its February merger with xAI, SpaceX is reportedly seeking a $1.75 trillion valuation and aiming to raise up to $75 billion. Starlink’s first-mover advantage is central to that bull case. But Delta’s decision shows Amazon does not need to match SpaceX satellite for satellite to win important customers. If AWS relationships, commerce, and content can help close the gap, the Starlink monopoly narrative starts to weaken.
OpenAI closed a staggering $122 billion funding round, catapulting its valuation to $852 billion. To put that in perspective, Sam Altman’s firm is now worth more than JPMorgan Chase and already sits among the 15 most valuable companies in the world.
OpenAI’s announcement read less like a press release and more like a draft for an IPO prospectus. The company touted:
900 million weekly active users (on track to hit 1 billion in 2026).
50 million paying subscribers.
$2 billion in monthly revenue (implying ~$24 billion ARR).
Growing 4x faster than Google or Meta did at the same stage.
Perhaps the most notable shift is in the revenue mix. Enterprise sales now account for 40% of the business and are on track to reach parity with consumer subscriptions by year-end. That helps explain the pivot to enterprise and coding.
This new war chest is meant to fund an AI infrastructure roadmap expected to require roughly $1.4 trillion over time.
The biggest checks came from three players. Amazon committed $50 billion, although $35 billion is tied to IPO or AGI milestones. NVIDIA and SoftBank each committed $30 billion.
Amazon and NVIDIA are not investing purely for financial return. They both benefit if OpenAI remains a major buyer of compute and infrastructure in a market where heavy AI spending lifts the whole ecosystem.
In a move typically reserved for public companies, OpenAI raised $3 billion directly from individual investors through bank channels and secured placement in Cathie Wood’s ARK ETFs. Bringing individual investors into the round does two things: it creates a larger base of brand evangelists and helps frame a future IPO valuation.
Still, private-market enthusiasm does not guarantee public-market upside. Plenty of companies that went public in 2022 ended up trading below their last private valuations. OpenAI may still command enormous demand when it lists, but what happens after the IPO debut is far less certain.
OpenAI now has the market cap of the incumbents and a CapEx plan that rivals the Mag 7. What it lacks is an incumbent-like cash machine. Quite the opposite: cash burn for 2026 alone is expected to exceed $14 billion.
That’s where the economics start to matter. Sacra estimates OpenAI’s gross margin was just 33% in 2025, well below the 46% target. Inference costs (the chips and electricity required to answer prompts) rose almost as fast as revenue. This is not the kind of high-margin model that powered Meta and Google in their early years.
To justify its latest valuation, OpenAI would need to generate $24 billion in profit, not in revenue. With margins like these, that points to a business closer to $250 billion in annual revenue, or about 10x today’s run rate.
That leaves little room for strategic misfires like Zuck’s Metaverse. Capital-intensive businesses cannot afford too many expensive detours, and OpenAI does not have Meta’s luxury of funding moonshots from a wildly profitable core business. The recent Sora stumble is a reminder that not every big bet will land, even with strong execution.
The $852 billion question is whether OpenAI can start generating real cash before investors start challenging the multiple.
That's it for today.
Happy investing!
Thanks to Fiscal.ai for being our official data partner. Create your own charts and pull key metrics from 50,000+ companies directly on Fiscal.ai. Save 15% with this link.
Disclosure: I own AAPL, GOOG, META, NVDA, and TSLA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
2026-04-01 04:35:37
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What to expect in this monthly report?
🚙 EVs: Rivian, Xiaomi, NIO.
💳 Fintech: StoneCo, dLocal.
🥫 FMCG: Celsius, General Mills.
😎 Tourism: Carnival, Vail Resorts.
🛢️ Energy: Aramco, Chevron, Oxy.
⚙️ Semis: Broadcom, Micron, Marvell.
🤖 AI infrastructure: Oracle, CoreWeave.
🌐 Internet platforms: Tencent, Meituan.
☁️ Workflow: Asana, DocuSign, GitLab, UiPath.
📊 Data: C3.ai, HPE, MongoDB, Rubrik, Samsara.
🛡️ Cybersecurity: CrowdStrike, Okta, SentinelOne.
👟 Consumer brands: Nike, Adidas, Lululemon, On.
📦 E-commerce: Alibaba, Sea, JD, Pinduoduo, Chewy.
🛒 Retail: Costco, Target, Best Buy, Home Depot, Lowe’s.
And more, like Accenture, Adobe, Darden, Didi, FedEx, GameStop.
2026-03-28 22:01:57
Welcome to the Saturday PRO edition of How They Make Money.
Over 300,000 subscribers turn to us for business and investment insights.
In case you missed it:
📊 Monthly reports: 200+ companies visualized.
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📩 Saturday PRO reports: Timely insights on the latest earnings.
Today at a glance:
📦 PDD: Growth Pivot
📱 Xiaomi: Memory Crunch
🛵 Meituan: The Subsidy War
🛳️ Carnival: Energy Volatility
🐶 Chewy: Loyalty Flywheel
Temu parent PDD Holdings capped off FY25 with Q4 revenue rising grew 12% Y/Y to $17.7 billion ($0.4 billion miss), an acceleration from the single-digit growth seen earlier in the year.
The core story is Temu’s stabilization. After struggling with the end of the US de minimis tax exemption, the global bargain app regained momentum during the holiday season and now operates in nearly 100 markets. Transaction services revenue (which includes Temu) surged 19% to $9.1 billion in Q4, suggesting that PDD is successfully navigating the new tariff landscape by diversifying into Europe and optimizing its supply chain.
While growth improved, net income slid 11% to $3.5 billion ($0.52 EPADS miss). The company continued its aggressive campaign of “deliberate sacrifice” to fortify its ecosystem. Margins compress slightly for another quarter.
Management has launched a massive three-year strategy aimed at “building another Pinduoduo” by shifting focus from raw traffic to deep supply-chain integration.
Support program: PDD is pouring resources into merchant support and last-mile logistics, including a new “free delivery to villages” pilot that establishes warehouses in remote rural areas to unlock untapped consumption.
Regulatory headwinds: The quarter was not without friction. Beijing authorities deepened their probe into PDD’s accounting and tax practices following a highly publicized literal fistfight between employees and regulators in December.
Supply chain conviction: Co-CEO Jiazhen Zhao emphasized that 2026 marks a new decade for the firm, with an “all-in” mindset on supply chain investment that will continue to pressure short-term margins.
Despite the earnings miss, the stock jumped post-earnings as investors cheered the revenue acceleration and easing trade tensions. The US Supreme Court’s recent ruling against certain 2025 tariffs and the potential creation of a “US-China Board of Trade” have provided a much-needed reprieve for cross-border e-commerce.
PDD’s balance sheet remains a fortress, with cash and short-term investments climbing to ~$60 billion. Management continues to warn that quarterly profits will fluctuate as they prioritize merchant retention over short-term earnings.